Former CBO Director: Here Are The Real HCR Numbers

As the future of the country sits upon the precipice of a toilet bowl, some enlightening numbers from a former CBO Director.

In a NYT Op-Ed, former CBO Director, Douglas Holtz-Eakin, lays out what the true numbers are for the Senate drafted health care bill. Buh bye deficit reduction!

ON Thursday, the Congressional Budget Office reported that, if enacted, the latest health care reform legislation would, over the next 10 years, cost about $950 billion, but because it would raise some revenues and lower some costs, it would also lower federal deficits by $138 billion. In other words, a bill that would set up two new entitlement spending programs — health insurance subsidies and long-term health care benefits — would actually improve the nation’s bottom line.

Could this really be true? How can the budget office give a green light to a bill that commits the federal government to spending nearly $1 trillion more over the next 10 years?

The answer, unfortunately, is that the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.

In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.

Mr. Holtz-Eakin details what we know, i.e. taxation starts immediately with benefits being pushed out 3 years, as well as a few things we didn't:

Consider, too, the fate of the $70 billion in premiums expected to be raised in the first 10 years for the legislation’s new long-term health care insurance program. This money is counted as deficit reduction, but the benefits it is intended to finance are assumed not to materialize in the first 10 years, so they appear nowhere in the cost of the legislation.

Another vivid example of how the legislation manipulates revenues is the provision to have corporations deposit $8 billion in higher estimated tax payments in 2014, thereby meeting fiscal targets for the first five years. But since the corporations’ actual taxes would be unchanged, the money would need to be refunded the next year. The net effect is simply to shift dollars from 2015 to 2014.

Make sure to read it in it's entirety, even if it's only academic at this point.

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Something Stinks: NYT and WAPO Admit CBO Numbers Don't Pass Smell Test

Pretty sure this is not the CBO that NYT or WAPO were referring to...

Via Yid With Lid:

The WAPO analysis, pointed out that it is just an estimate and no one really knows for sure how the bills costs will really shake out and his particular estimate is more shaky than usual.

Budget experts generally have high praise for the work of CBO analysts, the non-ideological technocrats who crunch the numbers to estimate the fiscal impact of legislation. But their work is often more art than science, and although the forecasts that accompany legislation are always filled with uncertainty, this one contains more than most.

For example, the legislation contains subsidies for those who would not be able to afford health coverage on their own — but the cost of those subsidies could vary a lot depending on how much other elements of the legislation change the price of health insurance, such as through provisions requiring minimum coverage levels.

The New York Times goes even further, pointing out that there was no way the CBO report was going to show numbers that did not work out in favor of Obamacare:

Congressional Democrats have spent more than a year working with the nonpartisan budget office on the health care legislation, and as they fine-tuned many of the bill’s various provisions in recent weeks, they consulted repeatedly with its number-crunchers and the bipartisan staff of the Joint Committee on Taxation. In other words, the overall numbers were never going to miss the mark. Whenever the budget office judged that some element or elements of the bill would cause a problem meeting the cost and deficit-reduction targets, Democrats just adjusted the underlying legislation to make sure it would hit their goal.

In other words the bill precise language of the bill was written in a way to make the numbers look good, whether they actually do or not is another story all together.

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